HDFC Life may be first to list on FDI easing

MUMBAI: HDFC Life may be the first among insurance companies to go public as it prepares to list on the stock exchanges as the government prepares to raise FDI limit in the sector.

The joint venture partner, Standard Life of the UK, has agreed to list the company which could be valued at over 6,000 crore, said people familiar with the valuation process. Its internal valuation based on the market consistent embedded value method comes to 4,820 crore based on last fiscal finances.

"Our plan is to list the company as soon as possible and if FIIs are allowed, we may be the first to do so," said an executive of HDFC Life on condition of anonymity. "FIIs will help us get a better valuation."

The government is planning to allow foreign institutional investors own up to 23 per cent in insurance ventures, while capping the investment limit of foreign insurers at the current level of 26 per cent, taking the total foreign holding to 49 per cent.

A Standard Life spokesperson said the company will consider a partial divestment to public if rules allow. "We would consider a partial public sale of this business should legislation and market conditions allow."

In fact, Standard Life is also open to raising its stake in the venture, if laws permit. "Our position remains that should the opportunity arise in future, we will give serious consideration to increasing our stake in our Indian life joint venture," the spokesman said.

The company has seen a 63 per cent jump in profit during the first half of the financial year at 216 crore from 132 crore. It has grown its income 11 per cent by selling new policies and registered 9 per cent growth in renewal income.